Renewables: Brussels gives the green light to €23 billion in aid for Italia
The scheme will enable the creation of 37.15 gigawatts of additional capacity. Pichetto Fratin: “A step forward for innovation and energy security”
Key points
- Pichetto Fratin: a step forward for innovation and energy security
- The EU plan to reduce energy bills
The European Commission has given its long-awaited approval to the draft FerX decree, which, once fully implemented, will enable the government to support the development of established technologies such as solar, wind and hydroelectric power, as well as plants for treating waste gas from wastewater treatment processes. The scheme provides for a maximum quota of 37.15 gigawatts of new renewable capacity, of which 10 GW is reserved for plants with a capacity of up to one megawatt, which will not participate in the auctions, and the remaining 27.15 GW for larger plants. The scheme is expected to be worth up to €23 billion in total: a figure which, according to the statement released yesterday by Brussels, is based on market price estimates and could be significantly lower should market prices exceed expectations.
Pichetto Fratin: a step forward for innovation and energy security
“The European Commission’s approval,” commented Gilberto Pichetto Fratin, Minister for the Environment and Energy Security, yesterday, “enables us to continue with the development of power plants fuelled by mature renewable energy sources.” It is a strategic tool, the Forza Italia representative added, “to strengthen the country’s energy independence, reduce dependence on foreign sources and ensure the continuity of the transitional mechanism that came into force in 2025.”
Now it’s off to the Court of Auditors
The text will now be forwarded to the Court of Auditors for registration prior to publication on the Ministry’s website. This is, therefore, an important step in the process of accelerating the national energy transition. As the European Commission itself explains, the 37.15 GW of additional capacity covered by the decree represents approximately 48% of Italia’s current renewable energy capacity. If successfully implemented, the scheme will contribute significantly to achieving Italia’s decarbonisation target, enabling the country to reach 39.4% of gross final electricity consumption from renewables by 2030.
Contracts for Difference
As you will recall, the aid will take the form of variable payments under 20-year two-way contracts for difference, which provide for a bonus for every kilowatt-hour of electricity generated and fed into the grid, based on a so-called strike price. The mechanism is well known: if market prices for electricity are lower than the strike price, the State will pay the difference. If, on the other hand, they are higher, the companies will reimburse that amount.
The auction for power plants with a capacity of over one megawatt
It will now be up to the Ministry to organise a separate tender procedure for solar and wind technologies with a capacity exceeding one megawatt, for which bidders must meet additional pre-selection criteria set out in the Net Zero Industry Regulation, designed in line with Regulation (EU) 2024/1735 (the Net Zero Industry Act) and with Implementing Regulation (EU) 2025/1176, which governs the non-price criteria to be applied in public auctions for the deployment of green energy. Plants with a capacity of less than one megawatt, on the other hand, will be able to benefit directly from the scheme without participating in a tender procedure: in this case, the operating price will be set administratively by ARERA.
